Abstract

Self-signaling models predict less selfish behavior in a probabilistic giving setting as individuals are expected to invest in a pro-social identity. However, there is also substantial evidence that people tend to exploit situational excuses for selfish choices (for instance, uncertainty) and behave more selfishly. We contrast these two motivations (identity management and self-deception) experimentally in order to test which one is more prevalent in a reciprocal giving setting. Trustees' back transfer choices are elicited for five different transfer levels of the trustor. Moreover, we ask trustees to provide their back transfer schedule for different scenarios that vary the implementation probability of the back transfer. This design allows us to identify subjects who reciprocate and analyze how these reciprocators respond when self-image relevant factors are varied. Our results indicate that self-deception is prevalent when subjects make the back transfer choice. Twice as many subjects seem to exploit situational excuses than subjects who appear to invest in a pro-social identity.JEL classifications: C72, C91, D80, D91

Highlights

  • Many people behave pro-socially—if the only other choice is selfish behavior

  • As a substantial fraction of subjects makes a self-serving scenario choice, our results indicate that reciprocators make use of moral wiggle room if situational excuses exist

  • The remaining 33 selected scenario 1 and made sure the back transfer reaches the trustor. They made no use of moral wiggle room in the scenario 2–4 back transfer choices and resisted the moral wiggle room provided by the scenario choice

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Summary

Introduction

Many people behave pro-socially—if the only other choice is selfish behavior. Bayesian self-signaling models propose a different type of behavior in an allocation decision. Individuals derive utility the more they believe they are a pro-social type. They are inherently unsure whether they are a pro-social type (or instead pro-self). They may give in order to send a positive signal to their self.

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